1 Top TSX Tech Stock to Load Up on Right Now

Here’s why long-term investors seeking a top-notch growth stock should consider TMX Group (TSX:X) in this current environment.

| More on:

Image source: Getty Images.

Investing in technology stocks isn’t as easy as it looks. Indeed, today, there’s a divergence showing up among various growth stocks. Some are continuing to outperform, while others are struggling amid a rather bearish outlook right now for interest rates and the Delta variant. However, one tech stock I’ve got my eye on right now is TMX Group (TSX:X).

TMX is the parent company of the Toronto Stock Exchange. Accordingly, this company’s financial picture has become brighter in recent years, as more companies list on the exchange and undertake equity issuances.

Let’s dive into why this is a top tech stock that should be on every investor’s radar right now.

Key catalyst remain strong for this tech stock

On a year-to-date basis, TMX stock is looking very strong. Earlier this month, the company closed near an all-time high, as investors piled into this trade. The company posted revenue and earnings well above analyst expectations. Accordingly, the outlook remains strong for this tech stock.

These stronger-than-expected top- and bottom-line results were driven by a surge in issuances. Over 90 issuers have listed during the company’s first quarter, and continued activity through the second quarter cemented the thesis on TMX stock. Revenues coming from capital formation surged 44% year over year. These numbers have remained strong, and many expect continued outperformance from TMX over the medium term.

That said, risks do exist. If the market turns over as a result of Fed tapering and higher interest rates, perhaps these catalysts will dissipate. Time will tell. However, for now, TMX looks well positioned to maintain its standing as a high-margin growth stock in today’s otherwise overvalued market.

Bottom line

I think TMX is well positioned for growth over the medium term. The company has announced its intention to take over TradeSignal GmbH to expand the company’s presence in Europe. This move could prove to be a transformative deal for investors.

Again, time will tell how things turn out for TMX Group. However, I like the company’s fundamentals and the safety this growth stock provides relative to its peers. This is a tech stock providing the right mix of growth and defensiveness simultaneously.

Accordingly, I view this top TSX tech stock as one long-term investors should consider. After all, it’s hard to find a company like TMX with strong fundamentals, a clean balance sheet, and plenty of runway for growth. This is a stock that isn’t cheap but is fairly valued due to the company’s data analytics and listing businesses.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool recommends TMX GROUP INC. / GROUPE TMX INC.

More on Tech Stocks

Man considering whether to sell or buy
Tech Stocks

BlackBerry Stock Is Down 20%: Buy the Dip or Call It a Pass?

BlackBerry stock has seen a series of 20% monthly dips since December 2023. Should you buy the dip or call…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Kinaxis: The AI Stock Investors Are Missing Out On

Kinaxis stock (TSX:KXS) is one AI stock you don't want to miss, with proven results and long-term contracts leading to…

Read more »

telehealth stocks
Tech Stocks

Forget Shopify Stock: 1 Tech Stock to Buy Instead

Shopify stock (TSX:SHOP) plunged by over 20% after earnings guidance for the second quarter came in lower, but this other…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Tech Stocks

Down 27% But Not Out: Why Dye & Durham Is a Buy Today

Dye & Durham stock reported a steep fall of 27% in two months. What happened? Should you be worried about…

Read more »

A chip in a circuit board says "AI"
Tech Stocks

These 2 AI Stocks Are Set to Soar in 2024 and Beyond

Here are two of the best AI stocks in Canada that you can buy now and hold for at least…

Read more »

edit Sale sign, value, discount
Dividend Stocks

2 Bargains I’d Buy as They Dip Toward 52-Week Lows

Buying a stock at its 52-week low is a bargain when you are confident this stock will recover sooner or…

Read more »

stocks rising
Dividend Stocks

2 Market-Beating TSX Stocks That Are Still Buys Today

goeasy (TSX:GSY) stock has easily beaten the TSX. Together with Celestica (TSX:CLS), the growth stocks could gain much more value…

Read more »

Growth from coins
Tech Stocks

A Few Years From Now, You’ll Wish You Had Bought This High-Growth Stock

Are you looking for a high-growth stock that can make you a millionaire a few years from now? Then read…

Read more »